Initial coin offerings: SEC stance discouraging issuances

Author: Olly Jackson | Published: 3 Aug 2018

Initial coin offering (ICO) issuers are
increasingly adopting a two-tiered approach which satisfies
retail investors and institutional investors - and regulators -
by offering both security tokens and utility tokens in a single
offering. But the Securities and Exchange
Commission’s (SEC) view that all ICOs are
securities is making this impossible in the US and deterring
issuers.

Many ICOs now offer security tokens for
institutional investors and high-net worth individuals to avoid
regulatory uncertainty, and utility tokens for retail investors
which would allow the core cryptocurrency community to invest.
While the regulatory landscape is still far from clear, issuers
are taking matters into their own hands and adopting securities
rules even if they may not need to do so.

"Much of the crypto community and existing businesses who
want to use crypto in their business would welcome regulatory
certainty," said John Salmon, partner at Hogan Lovells. "Every
issuer of...